The Senate took up its version of the budget bill this past Tuesday March 25^th.  It passed without opposition. The House version is several weeks behind.  The mechanics of this process are the Senate will send their version of the bill over to the House, the House will replace it with the House version, pass it and send it back to the Senate.  The Senate will not accept the House version and call for a conference committee and that is when the real work will begin.  They will spend a good portion of the month of April hashing out the details before a final compromise version is put before the membership of both bodies.  Keep in mind the ONLY bill that is required to pass during the legislative session is the budget. 

This past March 14^th (midnight) was the bill filing deadline.  From this point forward only local bills or bills with unanimous consent can be introduced.  It looks like a total of around 8,700 bills and resolutions  were introduced.  You may recall that at the beginning of this session I reported that about 15% actually get signed by the Governor or allowed to become law without his signature.  We will see if that trend continues this session. The ultimate success of any particular bill may very well depend on who votes in favor of vouchers.

While the Senate has had a floor calendar along with a variety of Senate bills already passed, the House has yet to have a real calendar.  This discrepancy between the Senate and the House processes is normal for this time of year.  The House takes longer to get organized, longer to pass a bill out of committee and longer to get through the process and get it to the floor.  While the Senate does not have a “calendar” committee (the Lt. Governor determines the calendar) the House has an extra step.  Once a bill has been voted out of the committee to which it was referred, it must go to the Calendars committee which sets the final schedule for the floor.  At that point the bills are taken in the order in which they appear on the calendar and are considered and either passed and/or amended and passed on second and third reading or not.  If they fail passage that is the end of that particular bill.  Although, it is not unusual to see the language once again as an amendment on another bill.  If it is a House bill it then goes to the Senate and the process begins again.  If it is a Senate bill and it us unchanged in the House it can go straight to the Governor for his consideration.  If it is amended, it returns to the Senate to consider the House changes.  If the Senate agrees to the House changes it goes to the Governor, if the Senate does not agree to House changes they can request a conference committee to work out the differences.  Once the conference committee comes to an agreement it then goes back to both Houses for final approval (or not) and if it is approved then it goes to the Governor for his consideration.

It sounds complicated (and it is) but the system ensures that we are not flooded with new laws every 2 years.  As a taxpayer that is probably a good thing.

On March 4^th, Texas Desal hosted our 2^nd TXD Legislative Workshop in Austin, at the Austin Club. (Same site as last session).  We needed a bigger room.  Interest in desalination and its future has become “a thing”.  We had an excellent lineup of presentations including House Natural Resources Chairman Cody Harris and Andrew Parks, Senator Perry’s Committee director.  While the accommodations were a little cramped, I think everyone walked away feeling good about the increased interest in desalination and better informed as to the water availability (or lack thereof) in Texas and potential solutions on the horizon.  

The 2 main water bills this session, SB 7 and HB 16, have been filed and referred.  The SB has already been heard and voted out of committee.  The bills are different so lots of wrangling to go but the level of interest and focus by the members in both chambers bodes well for the ultimate success of new water focused legislation.  We will continue to monitor the progress of both bills. 

The Texas Desalination Association has testified (TXD president Bill Norris) on both bills and will continue to participate at the committee level as these bills move through the process.

As always there are several bills that your association monitors throughout the legislative session.  We will keep our members informed as to the intent of these proposed bills and how they might impact our future water needs and the state of Texas as a whole.  Water is a focus this legislative session, we will take advantage while the iron is hot.

So, the session will finally get going.  It has been going, it will now really get going.  The jigsaw puzzle that is naming the House committees is always a thing, it is even more of a thing when you have a new Speaker and 52 (count ‘em) 52 House members vote against the winner.  The Speaker and his team addressed that unique situation in an interesting way, reaching across the divide by giving important positions (read chairs) to some of those who voted against him, employing veteran legislators in key areas and doling out workhorse committee spots to some of his more vocal opponents.

The Speaker also seems to have established a potentially effective floor leadership group that will make itself felt as the session progresses.  For those of us who appreciate stability and predictability these actions have been well received.  Having an idea about what to expect is always a good thing.  It does not mean you always get what you want but maybe we will get what we need (paraphrasing Mick a bit).

With the naming of committees, bill referrals and hearings in the House will soon begin.  We can also expect the bill filing pace to pick up, even though we are already at around 4,600 bills filed (House and Senate) as of Friday, Nov. 21^st.  When talking to staff, rumor is there are probably still around 7K bills yet to be filed.  Filing deadline is Friday, March 14^th so plenty of time for many more important pieces of legislation to drop.  I do remember when 3,500 bills were considered a “busy” session.  Oh for days long past…

The Senate is going full blast working to pass the Lt. Governor’s priority bills, several of which have already been heard in committee and passed on the Senate floor, including the Education Savings Acct. (Vouchers) an increase in the Homestead exemption ($140K) and bail reform.  It is probably safe to say that the House version of these bills will look somewhat to completely different so stay tuned.  As an aside, the Senate has always organized itself at the beginning of the session, more quickly than the House, so this pace is not completely unheard of.    

An issue that seems of universal interest this session is water.  This is not a new problem, certainly our ag producers in the high plains understand the increasing scarcity and expense of water.  The Ogallala aquifer, from which much of the water utilized on the high plains for all agriculture is pumped, is slow to recharge, and continuous and expanded use over the last 100 years have lowered the water table to the point that in some cases the water can be too expensive to withdraw.      

We have already seen how lack of water impacts the local agriculture economy.  I can remember when citrus was a massively important crop in south Texas.  The so called “winter garden” of Texas.  Citrus plays a much smaller role in the south Texas economy than it once did.  Water scarcity is part of the reason.  Another example was the closing of our last sugar cane processing plant in south Texas.  Unable to acquire the necessary irrigation water meant that sugar cane was no longer a viable crop.  Our farmers stopped growing the crop and the need for the processing plant went away. 

The need to address our lack of water and the ever-increasing population needing that water seems to have finally bubbled to the surface and become of importance to more than just a handful of legislators.  A long time coming.

An interesting addition to the water equation this session will be the on-going work of the Produced Water Consortium.  Capturing this fracking byproduct and making something useful could be truly impactful.  Seeing the increasing number of stories regarding earthquakes and polluted water being forcefully ejected from abandoned wells should make all of us take note.  Taking this polluted water, cleaning it and using it to irrigate suitable crops may offer a solution where the current practice is no longer practical.

Another “headline” issue is the whole “voucher” question which may be resolved this session.  Even though the Senate has passed a pretty straightforward Education Savings Account (ESA) bill, expect the House version to be a bit more nuanced and connected to significantly increased public education funding.  Hashing out those differences will not be straight forward or easy, expect that discussion to continue throughout the remainder of the session.  The Texas Desalination Association is hosting our Legislative session workshop on March 4^th.  The agenda is set and looks to have something of interest for everyone.  If you have not already registered to attend take a moment to do so.  Space is limited, the presentations will be impactful.  I hope to see you there.

Last session approximately 8,530 bills and resolutions were filed during the course of the session.  Of those, the number of bills that actually got to the Governor’s desk was 1,357 that he either signed or allowed to become law without his signature or right at 16%. 

So far this session around 2,400 bills have been pre-filed as of 1/6/24.  The final day to file bills during the legislative session is March 14^th, so there is plenty of time to exceed last year’s total.  The subject matter of the bills so far is fairly random, although the majority fall into several predictable categories:

Healthcare related……568

Education/Teachers….375

Courts/Civil matters…259

Taxation……………………..216

Insurance…………………..108

These numbers are not a complete surprise, heath care and education are the 2 largest budget items for our state.  The taxation number (which includes property tax bills) is lower than I would have thought, but there is plenty of time for that number to increase. 

These numbers show that successfully passing a bill and getting it to the Governor’s desk is extremely rare.  This session may prove to be even more challenging than usual. 

The Speaker’s race.

Much has occurred since last we checked in on the ever-changing race for Texas Speaker of the House.  And in this season of giving, like a good “sock of the month club,” for those of us who enjoy speculating, this race is the gift that keeps on giving.

First, we have the current Speaker, who, after a difficult nail biter of a primary and relatively quiet through most of the summer, decides to withdraw from the race as head of the Texas House of Representatives.  He withdraws, one would assume because he no longer had the votes.  The “whys” of his withdrawal are a mystery but there are some clues if one looks.

This withdrawal comes after raising considerable amounts of money from supporters and the lobby industry.  I wonder if anyone will see any of those funds returned, given as it were to someone who was and intended to be the Speaker.  We can reserve judgement and give the former Speaker the benefit of the doubt on that and see what happens. 

Representative Cook of Mansfield, a relative newcomer to this process, after just being elected to his 3rd term is finding out just how fickle members of the legislature can be.  While he enjoys the support of a significant number of Republican House members, enough to apparently announce support of the caucus as a whole, but not enough to finish the race successfully, at least not right now. 

There are those pesky folks who just won’t go along with what appears to be a slight majority. 

Ah democracy, go figure.

Now we have a newcomer to the game, but only in the sense that he just recently filed paperwork to run for Speaker.  Chairman Burrows is a multi-term member from Lubbock who has most recently been chairman of the Calendars committee.  Clearly a member who understands the power maze through which the Texas House travels.  Apparently (according to outside and inside reports) after several votes of the Republican caucus and its inability to reach a successful consensus a significant number of its members walked out of the caucus meeting and decided to contact some of those on the other side of the aisle. This being the Christmas season and the time of miracles, a list is produced containing 76 names (you will remember that is the magic number) supporting that very same current Calendars committee chair, Chairman Dustin Burrows of Lubbock.  A press release is produced a press conference convened, and a proclamation is put forth, “the race is over, it’s time to work together, etc.” 

For about 30 seconds.

Representative Cook (remember him?) also put out a list, while somewhat shorter than the 76 needed, represents a majority of the Republican caucus (just barely).  And shockingly, there were some names on both lists.  I will leave you to decide the significance of that if any.

Well, this does represent a bit of a pickle.  There are still lots of members whose name do not appear on any list.  In the past, you either wanted to be one of the first 10 of the winning side or number 71-76. 

Those are the keys slots.  You have to have critical mass to begin a Speaker’s race and then the last few to put you over the top.  No one wants to be #83 or #102 those were pretty meaningless slots.  But now there seems to be uncertainty in those final spots for Chairman Burrows, much phone calling and promising going on as we speak, I suspect.

The vote for Speaker takes place on the first day of the legislative session, January 14^th at noon or soon thereafter.  That means for the next 8 days, those Republicans who committed to Chairman Burrows can count on being harassed by the local true believers as to why they are not following in lockstep with the Republican party leadership.  What was once a truly personal vote by a sitting member has now become fodder for local party leadership to make primary hay with. 

Just a reminder, all 150 members get to vote for Speaker, and the winner often has a very long memory. 

The contrast is of course the other side of the building.  Senate leadership is in place and remains virtually unchanged.  The only real difference in the Senate are the 3 new Senators, Senator Cook, Senator Hagenbuch and Senator Adam Hinojosa.  With the leadership intact, we await the Lt. Governor’s committee assignments which could come at any time.  Expect the Senate to hit the ground running and begin hearings fairly quickly.  The Lt. Governor runs a very tight ship and his priorities will begin to move through the process very efficiently. 

How the future Speaker deals with the Senate remains to be seen.  Even a disorganized House, under smart leadership can control the session and the pace.  While the Senate, it is often said has no rules, the House does and it is the Speaker, with the help of the parliamentarian who interprets them.

There was a session where a Speaker did not name committees till early March, creating a shorter even more chaotic session and controlling the pace and what bills ultimately made it to the floor.  How the incoming House speaker approaches his or her dealings with the Governor, Lt. Governor and the Senate will be the most interesting ticket in town and one that everyone will get to watch.  The old saying in the House was “it’s not the opposite party that is the enemy, it’s the Senate”.  Old school sentiment that.

Also in play of course is the approximate $20 Billion surplus recently reported by the Comptroller which as has been discussed in these pages before is not really $20 Billion extra.  There will be the supplemental appropriation which is passed early in the session, (this will eat up a significant amount of the surplus), the now continuing futile attempts to lower property taxes (remember last session), whatever deal is reached on vouchers/public school funding (this could be a very large number). Senator Perry’s water initiative ($5 Billion requested) and dealing with either the retired teacher/state employee retirement shortfall is on the menu this cycle. 

And of course, the current inflation increased obligations that we face with every state budget.

The show starts on January 14^th, tickets are free to everyone.  Thanks to modern technology everyone with access to a computer can watch almost every minute.  Like any good drama there is something for everyone.  Reality TV at it’s finest.

The Dog Days of Summer…

While it certainly feels like the Dog Days… I am a bit late with this update.  The Dog Days officially ended on August 11^th.  For those of us unsure from where the phrase originates it refers to the rising of the Dog Star, Sirius which rises at about the same time as the sun in the Northern hemisphere, July 3 thru August 11^th.

It is still hot in Austin though, Dog days or not.  Not as hot as last year, rain in July cooled things off considerably, but hot nonetheless.  I would like to say that its been quiet but that is not exactly correct, more likely the calm before the storm.

The storm after the runoff election has simply set the stage for what promises to be an interesting and turbulent legislative session. The consensus among the smattering of lobbyists I have visited with is that everyone is telling clients the same thing, “don’t expect to pass many meaningful bills.”  

We still have more elections to observe, the fall general elections and the ramifications from events up through the primary and eventual runoffs have not all played themselves out.  The stage is set and the actors have been chosen we just have to see the final act.  The Governor was successful in his efforts to change the composition of the Texas House, it just remains to be seen if these changes are sufficient enough to pass some sort of “education savings account” or voucher by any other name. 

Speaker Dade Phelan won reelection to his State House district beating David Covey by a narrow margin.  While it is not assured that he will be reelected as Speaker of the Texas House, I would not bet against him.  As a reminder there are 2 other Republicans who have announced their campaigns for Speaker. There could well be others who announce later this fall.  To date, the effort to unseat Speaker Phelan has not bubbled to the surface for others to see.  The last 4 Speakers (Craddick, Straus, Bonnen and Phelan) all won the seat in unique ways, not what one would have considered a “usual” speaker’s race, perhaps the “usual “ speakers race may not exist anymore. The Laney/Rudd type of race with clearly defined sides and months of campaigning may never happen again.  At least it does not appear to be happening this time. 

With the Republicans appearing unable to agree on a single candidate (at least not yet) the Democrats would appear to be ready to once again be king (or Speaker) makers.  This formula has worked in the past and would appear to be available to be utilized once again.  While Texas is reliably “Red” at the statewide and National level, there are some marginal Republican House districts that could be flipped with a larger than usual Democratic turnout for a potentially popular Presidential candidate.  Whether Vice President Harris is that candidate or not will play out over the next few weeks.  While certainly not enough to flip the Texas House, the possible increase in Democratic House seats could change the formula in the Speakers race. The unknown wildcard is Robert F. Kennedy, Jr. His eligibility for the Texas ballot will also influence something. What, remains to be seen.  He cuts across demographics and appeals to an odd cross section of voters.  How this might influence Texas House races is anyone’s guess.  Worth watching.

Texas now has 2 marine desalination facilities that have requested and received SWIFT funds from the Texas Water Development Board and the State of Texas.  The Corpus Christi plant will be located on the Inner Harbor Ship Channel which extends from the Gulf of Mexico to the Port of Corpus Christi.  The proposed Laguna Madre plant will be located on the North Shore of the Port Isabel Turning Basin off the Port Isabel Channel.  Laguna Madre requested $10 million to be used for the planning, acquisition and design of a seawater desalination plant.  The Corpus Christi project requested $535 million to be used for planning, acquisition, design and construction of the city’s inner harbor seawater desalination plant.  While Texas has many inland brackish water plants supplying significant amounts of water to a variety of customers, these are the first marine facilities that have not just been proposed but have made some significant steps forward toward actual construction and eventually providing water.  There are several more marine facilities proposed, we hope these successful steps help lead the way to more marine facilities making use of our gulf coast water resource.

The Senate Water, Agriculture and Rural Affairs committee met back on May 15^th, the discussion on desalination was front and center throughout that committee hearing.  Several desalination projects were discussed, questions asked and in general the presentations were well received.  The House has not yet had the Natural Resources Committee hearing but is expected later this fall.  We hope to continue the positive messages about desalination, both inland and now marine. While the recognition of desalination by decisionmakers is greatly appreciated, it is up to the industry to keep the message alive and relevant.  Texas will always need more water, desalination will always be part of the answer. The Texas Desal 2024 Annual Conference is fast approaching.  If you have not already made plans to attend, it is not too late, it promises to be an informative and relevant conference. The topics are timely, the speakers excellent and you cannot beat the price.  We hope to see you there.

We are just a few days out from the end of early voting for the May runoff election.  A few days  before we find out if the efforts to significantly change the makeup of the Texas House of Representatives is successful, or if the massive amounts of money that have been spent to date to make that change, have been spent in vain. I always try to go work a poll or 2 for some of our friends who need the help.  This year will be no different.  I have never really been sure if that makes a difference, but it makes the candidate happy.  Some of these runoffs could be decided by less than 2,000 votes.  Make sure you go vote for your candidate and take someone with you.  It will make a big difference. 

The disruption caused by this current election cycle reaches beyond just those individual candidates running for office.  The staff turnover, other member angst and lobbyists handwringing have all reached an 11 on our amplifiers.  Lobbyists don’t like change.  Status quo predictability is our comfort zone.  However, I feel certain that come next January 14, 2025, members will take an oath, the session will begin, bills will be filed, committees will meet, life in the Texas legislature will continue.  Every session is different, this one will be just the same.

The level of money being spent in this set of contested House primary races is truly unprecedented.  In several races, millions of dollars being spent between the initial primary election and the runoff.  (Keep in mind this is a $600 a month part-time job).  The race for Speaker Phelan’s House seat has become the most expensive House race in history.  To date, (primary and runoff) a total of $6.9 million has been spent.  $3.5 million on pro Phelan campaigning, $1.6 million directly on behalf of his opponent (Covey) and $1.8 on negative Phelan ads.  In many of these contested House races the total turnout in the runoff could be as small as 2,000 to 2,500 votes.  That puts per vote cost through the roof.  If Speaker Phelan is successful in his runoff, he will certainly run for Speaker again, and while it could be a challenging race, he would be the odds on favorite to win.  If Mr. Covey is successful, he will be a freshman House member, not the Speaker.  Whatever benefits the gulf coast enjoyed with Dade Phelan as Speaker will be gone.  Being a freshman House member is a tough, challenging transition.  Years after a successful time as a representative, a former House member told me I answered one of the most important questions that she needed answered during her first day of the session, that question was “where is the nearest bathroom?”  Another session, another freshman member, I found the member attempting to enter his capitol office before he was sworn in and finding the door locked asked how he could get a key.  I had to tell him he can’t get in until he is sworn in.  Being a freshman House member is difficult.  Making an impact as a freshman even more so.

The Senate Water, Agriculture and Rural Affairs committee had an interim hearing on Wednesday, May 15^th.  There were several items of interest on the agenda, not the least of which was a discussion of desalination efforts around the state.  An update was offered from the existing facility in San Antonio and El Paso with additional testimony (written and oral) about several potential projects around the state.  All told, a good portion of the hearing was devoted to discussion of ongoing and proposed desalination efforts.  It was nice to hear desalination taking such a prominent role.  I do believe there is a growing interest in Desalination outside of just Senator Perry.  The industry should take advantage of this mindset going forward.  The sooner we see more desalination (not just expansion of current operations) the better.  With the ongoing interest along the coast for new desalination let’s hope this high level of interest stays around into the upcoming legislative session. 

In addition to the desalination discussion, the committee also heard about current potential cyber-security efforts around Texas water systems.  A variety of witnesses including from the Tx. Department of Information Resources and the Texas Public Policy Foundation.

An update on the Produced water efforts was also on the agenda with testimony from the Produced Water Consortium, Texas Oil and Gas Association and the Texas Railroad Commission.  There were several other presentations and a host of witnesses dealing with Texas Water workforce, the need for new water sources and the state of water infrastructure in Texas.  It was a long and very comprehensive hearing.  Not sure what if any legislation for next session will actually come from this hearing but a wealth of information was presented.  There is a current estimation of another budget surplus going into next session.  It will not be as large as what we saw last session but still a significant amount of additional money.  One of our goals going forward is to increase the budget amount that was deposited into the New Water Fund. Let’s hope that by the time we get to January, our decision makers will not have forgotten just how hot and dry our upcoming summer is going to be.  A gentle reminder of our never-ending need for additional water.